Mattel 2013 Annual Report Download - page 28

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comparable toys sold by Mattel and may result in lower purchases of Mattel-branded products by these retailers.
In some cases, retailers who sell these private-label toys are larger than Mattel and may have substantially more
resources than Mattel.
Mattel’s failure to successfully market or advertise its products could have an adverse effect on Mattel’s
business, financial condition, and results of operations.
Mattel’s products are marketed worldwide through a diverse spectrum of advertising and promotional
programs. Mattel’s ability to sell products is dependent in part upon the success of these programs. If Mattel does
not successfully market its products or if media or other advertising or promotional costs increase, these factors
could have an adverse effect on Mattel’s business, financial condition, and results of operations.
Mattel depends on key personnel and may not be able to hire, retain, and integrate sufficient qualified
personnel to maintain and expand its business.
Mattel’s future success depends partly on the continued contribution of key executives, designers, technical,
sales, marketing, manufacturing, and administrative personnel. The loss of services of any of Mattel’s key
personnel could harm Mattel’s business. Recruiting and retaining skilled personnel is costly and highly
competitive. If Mattel fails to retain, hire, train, and integrate qualified employees and contractors, Mattel may
not be able to maintain or expand its business.
Mattel may engage in acquisitions, mergers, or dispositions, which may affect the profit, revenues, profit
margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel’s business. In addition,
Mattel has certain anti-takeover provisions in its by-laws that may make it more difficult for a third party
to acquire Mattel without its consent, which may adversely affect Mattel’s stock price.
Mattel may engage in acquisitions, mergers or dispositions, which may affect the profit, revenues, profit
margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel’s business. There can be no
assurance that Mattel will be able to identify suitable acquisition targets or merger partners or that, if identified, it
will be able to acquire these targets on terms acceptable to Mattel and to potential merger partners. There can
also be no assurance that Mattel will be successful in integrating any acquired company into its overall
operations, or that any such acquired company will operate profitably or will not otherwise adversely impact
Mattel’s results of operations. Further, Mattel cannot be certain that key talented individuals at those acquired
companies will continue to work for Mattel after the acquisition or that they will continue to develop popular and
profitable products or services. In addition, Mattel has certain anti-takeover provisions in its by-laws that may
make it more difficult for a third party to acquire Mattel without its consent, which may adversely affect Mattel’s
stock price.
Mattel relies extensively on information technology in its operations, and any material failure, inadequacy,
interruption, or security breach of that technology could have a material adverse impact on its business.
Mattel relies extensively on information technology systems across its operations, including for
management of its supply chain, sale and delivery of its products, reporting its results of operations, collection
and storage of personal data of customers, employees and other stakeholders, and various other processes and
transactions. Many of these systems are managed by third-party service providers. Mattel’s ability to effectively
manage its business and coordinate the production, distribution, and sale of its products depends significantly on
the reliability and capacity of these systems and third-party service providers. The failure of these systems to
operate effectively, problems with transitioning to upgraded or replacement systems, or a breach in security of
these systems could cause delays in product sales, reduced efficiency of its operations and reputational harm
which could adversely affect its business, and it could incur significant losses and remediation costs.
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